Global| Dec 12 2014U.S. Producer Prices Decline With Oil Costs; Services Prices Up Minimally
by:Tom Moeller
|in:Economy in Brief
Summary
The overall Final Demand Producer Price Index fell 0.2% during November (1.4% y/y) and reversed an unrevised 0.2% October increase. A 0.1% slip was expected in the Action Economics Forecast Survey. Prices excluding food & energy [...]
The overall Final Demand Producer Price Index fell 0.2% during November (1.4% y/y) and reversed an unrevised 0.2% October increase. A 0.1% slip was expected in the Action Economics Forecast Survey. Prices excluding food & energy remained unchanged (1.8% y/y) following a 0.4% jump. A 0.1% uptick was expected.
Services prices (64% of the total index) gained 0.1% (1.9% y/y) after a 0.5% jump. Final demand trade services prices inched 0.1% higher (2.5% y/y) following a 1.5% surge but prices for transportation of passengers declined 1.9% (+2.6% y/y). Prices for transportation and warehousing of goods for final demand fell 0.3% (2.0% y/y).
Remaining unchanged were construction prices for final demand (2% of the total index). They improved 2.2% y/y helped by a 0.5% October surge.
Final demand goods prices (34% of the total index) declined 0.7% (+0.4% y/y), led lower by a 3.1% decline (-5.9% y/y) in energy prices. Gasoline prices were off 6.3% (-14.2% y/y) while home heating oil prices declined 2.8% (-13.2% y/y). Natural gas prices fell 1.9% (+2.9% y/y) but electric power costs remained unchanged (3.3% y/y). Finished food prices edged 0.2% lower (+4.4% y/y) following a 1.0% jump. Beef & veal prices jumped another 1.6% (28.6% y/y) but dairy product prices declined 3.8% (+8.2% y/y).
Final demand prices for goods excluding food & energy slipped 0.1% (+1.6% y/y) for a second consecutive month. Passenger car prices remained unchanged (1.1% y/y) after a 1.0% jump while furniture prices ticked 0.1% higher (1.0% y/y). Private capital equipment prices edged 0.1% lower (+1.1% y/y).
Intermediate demand prices of processed goods were off 1.0% (-0.3% y/y) after a 0.9% decline.
Measured using the old formula, which is being phased out as the headline series, producer prices fell 0.6% (+1.0% y/y), the largest of four consecutive monthly declines. Food costs moved 0.5% lower (+5.5% y/y) while energy prices were again off 2.7% (-5.1% y/y). Prices excluding food & energy improved 0.1% (2.0% y/y).
Making Sense of Dissents: A History of FOMC Dissents from the Federal Reserve Bank of St. Louis is available here.
The PPI data are contained in Haver's USECON database with further detail in PPI and PPIR. The expectations figure is available in the AS1REPNA database.
| Producer Price Index (%) | Nov | Oct | Sep | Nov Y/Y | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Final Demand | -0.2 | 0.2 | -0.1 | 1.4 | 1.3 | 1.9 | 3.9 |
| Excluding Food & Energy | 0.0 | 0.4 | 0.0 | 1.8 | 1.5 | 1.9 | -- |
| Goods | -0.7 | -0.4 | -0.2 | 0.4 | 0.8 | 1.7 | 6.8 |
| Foods | -0.2 | 1.0 | -0.7 | 4.4 | 1.7 | 3.0 | 8.5 |
| Energy | -3.1 | -3.0 | -0.7 | -5.9 | -0.8 | 0.2 | 17.5 |
| Goods Excluding Food & Energy | -0.1 | -0.1 | 0.2 | 1.6 | 1.1 | 1.8 | 3.4 |
| Services | 0.1 | 0.5 | -0.1 | 1.9 | 1.6 | 1.9 | 2.1 |
| Construction | 0.0 | 0.5 | 0.0 | 2.2 | 1.8 | 2.9 | 2.2 |
| Intermediate Demand - Processed Goods | -1.0 | -0.9 | 0.1 | -0.3 | 0.0 | 0.5 | 8.9 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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